leshiy985/ShutterstockAmid rising tensions around the world, the UK government faces pressure to increase defence spending. External threats and uncertainty over the nature of peace talks with Russia over Ukraine have been in the spotlight. But there are also broader political and economic interests shaping these decisions.
The UK prime minister, Keir Starmer, must navigate commitments to Nato, expectations from allies and the influence of the defence industry. All the while, the squeeze on domestic spending and public scepticism loom large.
The UK’s total military spending for 2024-2025 is expected to be £64.4 billion, with a rise to £67.7 billion in 2025-26. This is equal to 2.3% of the entire UK economy (GDP). It would continue the trend of making the UK one of the highest military spenders in Europe. But it’s still not enough as far as the US president, Donald Trump, is concerned.
In 2023-2024, the UK’s Ministry of Defence spent its budget across several key areas. Around one-third went towards investment in things such as equipment, infrastructure and technology. Another big area of spending was personnel costs, accounting for around one-fifth of the spend.
In recent years, UK military spending has fluctuated, reflecting a balance between modernisation, deterrence and operational readiness. One of the most significant areas of investment has been in the UK’s nuclear deterrent (Trident).
At the same time, cyber defence has become a growing focus, with £1.9 billion allocated to counter threats such as increased cyber attacks and misinformation campaigns from foreign governments and political extremists. The UK has also committed to expanding its next-generation air capabilities.
Britain’s recent escalation in defence investment mirrors a global surge in military spending. In 2024, worldwide defence expenditures reached an unprecedented US$2.46 trillion (£1.95 trillion), marking a 7.4% real-term increase from the previous year.
This trend is particularly pronounced in Europe, where nations are bolstering their military capabilities in response to geopolitical tensions such as the war in Ukraine. Germany’s defence budget experienced a significant 23.2% real-term growth, making the country the world’s fourth-largest defence spender.
In the UK, Labour has pledged to increase defence spending to 2.5% of GDP, aligning with Nato expectations. It also serves as a response to concerns about the country’s military readiness. This could require several billion pounds more annually, raising questions about how this would be funded.
Publicly, the party presents this commitment as a necessary investment in the UK’s global standing and ability to deter aggression. However, you can argue that there is more at play.
Political and economic pressures
Starmer’s government inherited a complex set of geopolitical challenges, from European security concerns to the UK’s international relationships post-Brexit. Nato commitments remain a significant driver of defence spending, particularly as European allies anticipate shifts in US foreign policy under the second Trump presidency.
The UK must also respond to regional tensions beyond Europe, due to its military alliances in the Indo-Pacific and its arms trade relationships with Middle Eastern states.
Domestically, Labour’s commitment to raising defence spending is not just about security – it is also a political calculation. Starmer wants to dispel any perceptions that Labour is weak on defence.
However, it comes at a time of fiscal constraint. Any new defence commitments must compete with demands for public investment in healthcare, education and infrastructure. Without additional taxation or significant budget cuts, Labour may struggle to meet its defence spending targets without compromising other commitments.
Beyond geopolitical necessity, increased military spending benefits the UK’s powerful military-industrial complex (the relationship between the country’s military and its defence industry). Major defence contractors such as BAE Systems, Rolls-Royce and Lockheed Martin UK secure billions in government contracts.
The so-called “revolving door” between government and defence firms frequently sees former military officials and politicians taking on lucrative roles in private-sector defence companies.
But the cross-party consensus on expanding Britain’s defence industry, now embraced by trade unions and political commentators, reflects a narrow vision of economic security that overlooks more sustainable alternatives.
The sector’s 200,000 jobs are frequently claimed to justify increased military spending. But investment in renewable energy infrastructure and domestic energy production could both boost employment and address fundamental security challenges exposed by the Ukraine crisis.
The reliance on foreign energy sources can be weaponised by adversarial states, as reflected in the continued reliance of EU countries on Russia for their energy needs. By investing in domestic renewable energy infrastructure, the UK can insulate itself from geopolitical energy threats. Stable energy supplies can underpin both economic resilience and military readiness.
But there is a disconnect between strong government protection for arms manufacturers and relatively limited support for green technology development. This, even as climate change poses an escalating threat to national stability.
Labour faces a difficult balancing act. Increasing defence spending helps solidify the party’s credibility on national security. But domestically, it risks alienating voters who favour investment in social welfare over military expansion.
Additionally, higher military expenditure could make tax hikes or borrowing necessary. Both pose political hazards. And there is a real risk that increased spending will disproportionately benefit corporate defence giants rather than the public.
Starmer hopes increased defence spending will show that he is serious about European security.
Fred Duval/Shutterstock
Internationally, Starmer aims to signal Britain’s continued reliability as a Nato ally amid uncertainties about the US commitment to European security. This positioning becomes especially significant given the UK’s post-Brexit need to demonstrate its global relevance and military capability.
Labour’s drive to increase defence spending is also shaped by economic imperatives that extend beyond immediate security needs. The party faces pressure to expand a major sector of British manufacturing. At stake are not just defence capabilities but jobs, regional development and industrial strategy.
The government now finds itself caught between competing pressures. The commitment to military expansion reflects not just geopolitical imperatives but also domestic political calculations and economic concerns, which appear to be equally influential. And it raises fundamental questions about how national security priorities are truly determined in an era of multiple challenges.
Peter Bloom does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.